Since a few times ago, the most important Spanish banks are offering its customers a new product: reverse mortgage. This special kind of mortgages allows subscribers to enjoy the benefits of a higher income by obtaining an additional income related to the value of their properties.

Customers older than 65 years who would like to subscribe these reverse mortgages endorse their property as warranty of a mortgage loan, always retaining ownership but deciding if they want to occupy the house or prefer to rent it. Reverse mortgages can be subscribed both for main and second residences, but, for this last option, the transaction will not be exempt from specific taxation.

Although the early cancellation is accepted in reverse mortgages, heirs uses to be responsible for the payment, but only with the property, not with their own heritage. This means, heirs decide the way to cancel the loan by selling the property and cancelling the debt, subscribing a new standard mortgage, by foreclosure…

Every bank offers their customers different options depending on the loan amount and the preferred type of income: subscriber’s age and property value will be conditions for the amount; income could be calculated as an a monthly payment or, as an example, as only one payment corresponding to a percentage of the assessed value of the property.
When subscribing a reverse mortgage, the support of a third part, a freelance consultant is compulsory in order to confirm that special requirements of this kind of financial products have been perfectly understood by the signers.

MPC Group and its partners, Chapapría & Navarro Asociados and Legalmed, will be pleased to offer you legal and financial consultancy when you may need.